France Mulls Full-Licensing Regime for Crypto Firms Citing FTX Bankruptcy
Current rules in France give crypto firms the option, but not the necessity, to gain a full license. That may soon change.
France may compel crypto firms to get a full license to operate in the country after a lawmaker proposed aligning the country’s laws with incoming EU regulation.
Hervé Maurey, a member of the Senate who sits on the finance commission, put forward an amendment on Tuesday that would do away with a grace period France currently plans to extend to crypto platforms.
At present, the rules allow crypto companies to operate in the country without a full license until 2026. The new proposal, which was adopted by the Senate this week and will go to the French parliament next year, would require firms to gain a full license from the financial regulator starting in October next year.
This would bring it up to speed with the Markets in Crypto Assets (MiCA) regulation from the EU, which the European Parliament will likely vote on in 2023.
“The recent bankruptcy of FTX has highlighted the risks inherent in any investment in crypto assets, especially when the company operates outside of any regulation,” Maurey wrote in the amendment. “These concerns, including for financial players, are shared at the European Union level.”
France’s current two-tier system mandates companies to register as crypto asset providers but then gives them the option to gain a full license, which requires higher levels of disclosure. While around 60 providers have registered with the regulator Autorité des Marchés Financiers (AMF), none have opted for full authorization.
Maurey’s amendment said that MiCA will impose similar requirements to the more thorough optional authorization scheme.
His proposal would close the option of simple registration and require firms to get a full license, therefore bringing them in line with the E.U. framework.
France: Les amis de Crypto?
If the amendment is adopted by parliament, it could represent a blow to France’s crypto-friendly reputation, which has attracted firms such as Binance and Crypto.com to set up shop there.
Local crypto lobbying group Adan told the Financial Times that the amendment showed the country was “renouncing its ambition” to be the crypto hub of Europe on account of the FTX scandal.